Tax Efficient

Venture Capital Trusts (VCTs) raised £731 million in 2018/19 – the second-highest amount since their inception, meaning they continue to be a vital source of tax-efficient investment into UK small businesses. With such strong interest, we believe the time is ripe to provide advisers with a clear and insightful explanation of the rules and operating structures surrounding VCTs.

Recent government changes mean that there is now a greater focus on higher-risk investments, and as interest in the market continues to rise, understanding VCTs is more important than ever.

This Guide takes a practical, impartial look at VCTs to give advisers and paraplanners the confidence to discuss the potential benefits and pitfalls of this market with their clients.

2019 marks the 25th anniversary of the Enterprise Investment Scheme (EIS), and a number of legislative changes over the past few years mean it is quite a different beast to when it started a quarter of a century ago. While its aim of utilising tax-efficient investments to support small UK businesses remains undiminished, the rules around this have been given an overhaul. 

We, therefore, think the time is right to provide an update on those changes and offer financial advisers and paraplanners the tools to confidently and successfully navigate this market for their clients.

This Guide offers an impartial look at the nuts and bolts of investing in the EIS, offering practical support for advisers considering this market for their clients.

The Enterprise Investment Scheme (EIS) has gone through a number of changes in recent years but continues to prove its resilience and importance to UK small businesses. With the recent risk to capital change taking it back to its roots, there is a high degree of optimism within the market that it will continue to flourish in the coming years.

Our sixth edition of the Enterprise Investment Scheme Industry Report reflects this positivity in the market, with our adviser survey, roundtable discussion and industry debate with the managers all suggesting that the market has been changed for the better and EIS will continue to grow.

This report examines the market in more detail, as well as providing and analysing the latest government data and statistics from the MICAP platform. It also takes a closer look at the future of knowledge-intensive companies and the government’s knowledge-intensive fund.

As the government’s IHT take continues to increase year on year, the importance of Business Relief (BR) as an estate planning method has certainly not diminished. The OTS’ second report in its review of IHT recognised the importance BR in supporting family-owned businesses, and growth investment. While it has recommended addressing some inconsistencies in the rules governing BR qualification, it has also suggested changes that would open more trades and structures to BR eligiblity. 

This is a sector that offers advisers additional tools in their estate planning arsenal but it’s important to stay up to date with developments and create and leverage expertise to obtain the best client outcomes.